Legal & Regulatory

India’s 15th Lok Sabha: Five Years in Review

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DELHI – After India’s 15th Lok Sabha (lower house of Parliament) concluded its five year term last Friday, we take a look back at some of the highlights and accomplishments of what some in the media have labelled the “worst Lok Sabha in India’s democratic history.” Despite frequent disruptions and moderate productivity, however, the 15th Lok Sabha did pass a number of notable bills including the Lokpal Bill and an updated version of the Companies Act.

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India’s 2014 Interim Budget: Regulatory Highlights

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MUMBAI – While India’s Interim Budget for the fiscal year 2014-2015 does not propose any major changes in the nation’s tax laws, it does make a few notable changes in indirect taxes including excise duty, service tax and customs duty. It is important to keep in mind, however, that upcoming elections later this year make the new budget likely to be overturned in the near future (most likely in early June after a new government is formed in May).

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India Modifies Currency Declaration Regulations

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DELHI – Airline passengers travelling to India will soon be required to declare Indian currency exceeding Rs10,000 according to new customs regulations that will be implemented March first.

According to the new Finance Ministry regulations under the 2014 Customs Baggage Declaration (Amendment) Regulations, passengers will also be required to declare the number of bags, including hand baggage, they are bringing into the country.

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Government Clarifies FDI Policy in Insurance Sector

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NEW DELHI – In a press release yesterday the Department of Industrial Policy and Promotion (DIPP) clarified that the existing 26 percent cap on foreign investments in the insurance sector also applies to intermediaries such as brokers, third party administrators and surveyors. The official press release from the DIPP can be found here.

Previously, “other conditions” on FDI in the insurance sector reverted to the Insurance Act, 1938 and restricted investment to FDI under the automatic route providing companies obtain the necessary license from the Insurance Regulatory & Development Authority (IRDA).

Under the clarified conditions, the 26 percent cap will now apply to not only FDI, but also foreign institutional investments (FII) and investments from non-resident Indians (NRIs) under the automatic route. Furthermore, investors are now able to not only invest in an “insurance company,” but also in “insurance brokers, third party administrators and surveyors and loss assessors.”

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Tourists can Relax as India Eases Visa Regulations

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MUMBAI – Tourists traveling to India will now find their trips going much smoother.  India has announced that it plans to ease visa requirements for up to 180 countries.  The changes are expected to soon be officially approved by the country’s Planning Commission.

Currently, citizens from many countries, such as the U.S. and the U.K., have had to wait in line at local embassies or consulates to apply for a visa.  After the application, tourists then had to wait for several weeks before being granted a visa to India.

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India in Talks with Mauritius and Cyprus to Prevent Tax Base Erosion

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By Patricia Ieong

Jan. 10 – India is currently revisiting its double tax avoidance agreements (DTAAs) with both Mauritius and Cyprus as it takes measures to protect its tax base.  The two tax havens are India’s largest and seventh-largest sources of FDI inflows, respectively, together comprising almost 45 percent of India’s FDI in 2013 (around US$10 billion in the financial year ended March 2013).

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India Signs MoU to Boost Efficiency for Exporters in India

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Jan. 10 – The Director General of Foreign Trade and the Enforcement Directorate signed a memorandum of understanding this week to allow for the sharing of foreign exchange realization data between exporters and relevant governmental departments in India. The new MoU will make mandatory the sharing of foreign exchange realization data through the e-BRC (Electronic Bank Realization Certificate) program, which was implemented last year. The digitalization of foreign exchange realization data is expected to increase efficiency for exporters operating in India.

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India Approves New Anti-Corruption Agency

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Dec. 18 – India’s upper house of Parliament passed a measure Tuesday that will create a new independent anti-corruption agency with the broad authority to investigate senior politicians and other high-level allegations of corruption.

The Lokayuktas Bill (Lokpal Bill) has been stalled in the upper house for more than two years since social activist Anna Hazare first mobilized massive protests during his 2011 fast to encourage the more aggressive elimination of governmental corruption.

The earliest version of such an anti-corruption bill, however, was introduced more than 40 years ago in 1968, but it and several subsequent versions were never successfully approved by parliament.

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